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These excerpts taken from the WDC 10-K filed Aug 20, 2008. Sales and
Distribution
We sell our products globally to OEMs, ODMs, distributors and
retailers. OEMs purchase our hard drives, either directly or
through a contract manufacturer such as an ODM, and assemble
them into the computer or CE systems they build. Distributors
typically sell our hard drives to non-direct customers such as
small computer and CE manufacturers, dealers, systems
integrators, online retailers and other resellers. Retailers
typically sell our hard drive products directly to end-users
through their storefront or online facilities.
Original
Equipment Manufacturers
Sales to OEMs, which include sales through ODMs, accounted for
51%, 48% and 54% of our hard drive revenue in 2008, 2007 and
2006, respectively. During 2008, no single customer accounted
for 10%, or more, of our revenue. During 2007 and 2006, sales to
Dell, Inc. accounted for 10% and 12%, respectively, of our
revenue. We believe that our success depends on our ability to
maintain and improve our strong relationships with the leading
OEMs.
OEMs evaluate and select their hard drive suppliers based on a
number of factors, including quality and reliability, storage
capacities, performance characteristics, price, service and
support, ease of doing business, and the supplier’s
long-term financial stability. They typically seek to qualify
two or more providers for each generation of hard drives, and
once an OEM has chosen its qualified hard drive vendors for a
given product, it generally will purchase hard drives from those
vendors for the life of that product. To achieve success with
OEM qualifications, a hard drive supplier must consistently
offer hard drives featuring leading technology, quality and
reliability at acceptable capacity per disk. Suppliers must
quickly achieve volume production of each new generation of high
quality and reliable hard drives, requiring access to flexible,
high-capacity, high-quality manufacturing capabilities.
Many of our OEM customers utilize
just-in-time
inventory management processes or supply chain business models
that combine “build-to-order,” in which they do not
build until there is a firm order, and “contract
manufacturing,” in which the OEM contracts assembly work to
a contract manufacturer, such as an ODM, who purchases
components and assembles the computer based on the OEM’s
instructions. For certain OEMs, we maintain a base stock of
finished goods inventory in facilities located near or adjacent
to the OEM’s operations.
For an additional discussion of risks related to our need to
adapt to our customers’ business models and maintain
customer satisfaction, refer to Item 1A of this Annual
Report on
Form 10-K.
Distributors
We use a broad group of distributors to sell our products to
non-direct customers such as small computer and CE
manufacturers, dealers, systems integrators, online retailers
and other resellers. Distributors accounted for approximately
31%, 36% and 39% of our hard drive revenue for 2008, 2007 and
2006, respectively. Distributors generally enter into
non-exclusive agreements for specific territories with us for
the purchase and redistribution of our products in specific
territories. We grant our distributors limited price protection
rights.
Retailers
We sell our branded products directly to a select group of major
retailers such as computer superstores, warehouse clubs, online
retailers, and computer electronics stores, and authorize sales
through distributors to smaller retailers. Retailers accounted
for approximately 18%, 16% and 7% of our hard drive revenue for
2008, 2007 and 2006, respectively. Our current retail customer
base is primarily in the United States, Canada and Europe. The
retail channel complements our other sales channels while
helping to build brand awareness for WD and our products.
Retailers supply end-users with products to upgrade their
computers and externally store their data for backup or mobility
purposes. We grant our retailers price protection and limited
rights to return product on an inventory rotation basis. We also
sell our branded products through our web site.
Table of Contents
Sales and
Marketing
We maintain sales offices in selected parts of the world
including the major geographies of the Americas,
Asia Pacific, Japan, Europe and the Middle East. Our
international sales, which include sales to foreign subsidiaries
of U.S. companies but do not include sales to
U.S. subsidiaries of foreign companies, represented 76%,
68% and 68% of our revenue for 2008, 2007 and 2006,
respectively. Sales to international customers may be subject to
certain risks not normally encountered in domestic operations,
including exposure to tariffs and various trade regulations. For
an additional discussion regarding the risks related to sales to
international customers, see Item 1A of this Annual Report
on
Form 10-K.
For additional information concerning revenue recognition, sales
by geographic region and significant customer information, see
Part II, Item 8, Notes 1 and 6 in the Notes to
Consolidated Financial Statements, included in this Annual
Report on
Form 10-K.
We perform our marketing and advertising functions internally
and through outside firms. We target advertising, worldwide
packaging and marketing materials to various reseller and
end-user categories. We utilize both consumer media and trade
publications. We have programs under which we reimburse
qualified distributors and retailers for certain marketing
expenditures. We also maintain customer relationships by
communicating with our resellers and providing end-users with
information and support through our web site.
Sales and Distribution We sell our products globally to OEMs, ODMs, distributors and retailers. OEMs purchase our hard drives, either directly or through a contract manufacturer such as an ODM, and assemble them into the computer or CE systems they build. Distributors typically sell our hard drives to non-direct customers such as small computer and CE manufacturers, dealers, systems integrators, online retailers and other resellers. Retailers typically sell our hard drive products directly to end-users through their storefront or online facilities. Original Equipment Manufacturers Sales to OEMs, which include sales through ODMs, accounted for 51%, 48% and 54% of our hard drive revenue in 2008, 2007 and 2006, respectively. During 2008, no single customer accounted for 10%, or more, of our revenue. During 2007 and 2006, sales to Dell, Inc. accounted for 10% and 12%, respectively, of our revenue. We believe that our success depends on our ability to maintain and improve our strong relationships with the leading OEMs. OEMs evaluate and select their hard drive suppliers based on a number of factors, including quality and reliability, storage capacities, performance characteristics, price, service and support, ease of doing business, and the supplier’s long-term financial stability. They typically seek to qualify two or more providers for each generation of hard drives, and once an OEM has chosen its qualified hard drive vendors for a given product, it generally will purchase hard drives from those vendors for the life of that product. To achieve success with OEM qualifications, a hard drive supplier must consistently offer hard drives featuring leading technology, quality and reliability at acceptable capacity per disk. Suppliers must quickly achieve volume production of each new generation of high quality and reliable hard drives, requiring access to flexible, high-capacity, high-quality manufacturing capabilities. Many of our OEM customers utilize just-in-time inventory management processes or supply chain business models that combine “build-to-order,” in which they do not build until there is a firm order, and “contract manufacturing,” in which the OEM contracts assembly work to a contract manufacturer, such as an ODM, who purchases components and assembles the computer based on the OEM’s instructions. For certain OEMs, we maintain a base stock of finished goods inventory in facilities located near or adjacent to the OEM’s operations. For an additional discussion of risks related to our need to adapt to our customers’ business models and maintain customer satisfaction, refer to Item 1A of this Annual Report on Form 10-K. Distributors We use a broad group of distributors to sell our products to non-direct customers such as small computer and CE manufacturers, dealers, systems integrators, online retailers and other resellers. Distributors accounted for approximately 31%, 36% and 39% of our hard drive revenue for 2008, 2007 and 2006, respectively. Distributors generally enter into non-exclusive agreements for specific territories with us for the purchase and redistribution of our products in specific territories. We grant our distributors limited price protection rights. Retailers We sell our branded products directly to a select group of major retailers such as computer superstores, warehouse clubs, online retailers, and computer electronics stores, and authorize sales through distributors to smaller retailers. Retailers accounted for approximately 18%, 16% and 7% of our hard drive revenue for 2008, 2007 and 2006, respectively. Our current retail customer base is primarily in the United States, Canada and Europe. The retail channel complements our other sales channels while helping to build brand awareness for WD and our products. Retailers supply end-users with products to upgrade their computers and externally store their data for backup or mobility purposes. We grant our retailers price protection and limited rights to return product on an inventory rotation basis. We also sell our branded products through our web site.
Table of ContentsSales and Marketing We maintain sales offices in selected parts of the world including the major geographies of the Americas, Asia Pacific, Japan, Europe and the Middle East. Our international sales, which include sales to foreign subsidiaries of U.S. companies but do not include sales to U.S. subsidiaries of foreign companies, represented 76%, 68% and 68% of our revenue for 2008, 2007 and 2006, respectively. Sales to international customers may be subject to certain risks not normally encountered in domestic operations, including exposure to tariffs and various trade regulations. For an additional discussion regarding the risks related to sales to international customers, see Item 1A of this Annual Report on Form 10-K. For additional information concerning revenue recognition, sales by geographic region and significant customer information, see Part II, Item 8, Notes 1 and 6 in the Notes to Consolidated Financial Statements, included in this Annual Report on Form 10-K. We perform our marketing and advertising functions internally and through outside firms. We target advertising, worldwide packaging and marketing materials to various reseller and end-user categories. We utilize both consumer media and trade publications. We have programs under which we reimburse qualified distributors and retailers for certain marketing expenditures. We also maintain customer relationships by communicating with our resellers and providing end-users with information and support through our web site. This excerpt taken from the WDC 10-K filed Aug 28, 2007. Sales and
Distribution
We sell our products globally to OEMs, ODMs, distributors and
retailers. OEMs purchase our hard drives, either directly or
through a contract manufacturer such as an ODM, and assemble
them into the computer or other CE systems they build.
Distributors typically sell our hard drives to non-direct
customers such as small computer and CE manufacturers, dealers,
systems integrators, online retailers and other resellers.
Retailers typically sell our hard drive products directly to
end-users through their storefront or online facilities.
Original
Equipment Manufacturers
Sales to OEMs, which include sales through ODMs, accounted for
48%, 54% and 58% of our revenue in 2007, 2006 and 2005,
respectively. During 2007, our largest OEM customer was Dell.
During 2007, 2006 and 2005, sales to Dell accounted for 10%,
12%, and 16%, respectively, of our revenue. We believe that our
success depends on our ability to maintain and improve our
strong relationships with the leading OEMs.
Table of Contents
OEMs evaluate and select their hard drive suppliers based on a
number of factors, including quality and reliability, storage
capacities, performance characteristics, price, service and
support, ease of doing business, and the supplier’s
long-term financial stability. They typically seek to qualify
two or more providers for each generation of hard drives, and
once an OEM has chosen its qualified hard drive vendors for a
given product, it generally will purchase hard drives from those
vendors for the life of that product. To achieve success with
OEM qualifications, a hard drive supplier must consistently
offer hard drives featuring leading technology, quality, and
reliability at acceptable capacity per disk. Suppliers must
quickly achieve volume production of each new generation of high
quality and reliable hard drives, requiring access to flexible,
high-capacity, high-quality manufacturing capabilities.
Many of our OEM customers utilize
just-in-time
inventory management processes or supply chain business models
that combine “build-to-order,” in which they do not
build until there is a firm order, and “contract
manufacturing,” in which the OEM contracts assembly work to
a contract manufacturer, such as an ODM, who purchases
components and assembles the computer based on the OEM’s
instructions. For certain OEMs, we maintain a base stock of
finished goods inventory in facilities located near or adjacent
to the OEM’s operations.
For an additional discussion of risks related to our need to
adapt to our customers’ business models and maintain
customer satisfaction, refer to Item 1A of this Annual
Report on
Form 10-K.
Distributors
We use a broad group of distributors to sell our products to
non-direct customers such as small computer and CE
manufacturers, dealers, systems integrators, online retailers
and other resellers. Distributors accounted for approximately
36%, 39% and 36% of our revenue for 2007, 2006 and 2005,
respectively. Distributors generally enter into non-exclusive
agreements for specific territories with us for the purchase and
redistribution of our products in specific territories. We grant
our distributors limited price protection rights.
Retailers
We sell our branded products directly to a select group of major
retailers such as computer superstores, warehouse clubs, online
retailers, and computer electronics stores, and authorize sales
through distributors to smaller retailers. Retailers accounted
for approximately 16%, 7% and 6% of our revenue for 2007, 2006
and 2005, respectively. Our current retail customer base is
primarily in the United States, Canada and Europe. The retail
channel complements our other sales channels while helping to
build brand awareness for WD and our products. Retailers supply
end-users with products to upgrade their computers and
externally store their data for backup or mobility purposes. We
grant our retailers price protection and limited rights to
return product on an inventory rotation basis. We also sell our
branded products at our web site.
Sales and
Marketing
We maintain sales offices in selected parts of the world
including the major geographies of the Americas, Asia Pacific,
Japan, Europe, and the Middle East. Our international sales,
which include sales to foreign subsidiaries of
U.S. companies but do not include sales to
U.S. subsidiaries of foreign companies, represented 68%,
68% and 65% of our revenue for 2007, 2006 and 2005,
respectively. Sales to international customers may be subject to
certain risks not normally encountered in domestic operations,
including exposure to tariffs and various trade regulations. For
further discussion regarding the risks related to sales to
international customers, see Item 1A of this Annual Report
on
Form 10-K.
For additional information concerning revenue recognition, sales
by geographic region and significant customer information, see
Part II, Item 8, Notes 1 and 6 of the Notes to
Consolidated Financial Statements.
We perform our marketing and advertising functions internally
and through outside firms. We target advertising, worldwide
packaging and marketing materials to various reseller and
end-user categories. We utilize both consumer media and trade
publications. We have programs under which we reimburse
qualified distributors and retailers for certain marketing
expenditures. We also maintain customer relationships by
communicating with our resellers and providing end-users with
information and support through our web site.
Table of Contents
This excerpt taken from the WDC 10-K filed Nov 20, 2006. Sales and
Distribution
We sell our products globally to OEMs, distributors and
retailers. OEMs purchase our hard drives and assemble them into
the computer or other CE systems they build. Distributors
typically sell our hard drives to non-direct customers such as
small computer and CE manufacturers, dealers, systems
integrators, online retailers and other resellers. Retailers
typically sell our hard drive products directly to end-users.
Original
Equipment Manufacturers
Sales to OEMs accounted for 54%, 58% and 51% of our revenue in
2006, 2005 and 2004, respectively. During 2006, our major OEM
customer was Dell. During 2006, 2005 and 2004, sales to Dell
accounted for 12%, 16%, and 14%, respectively, of our revenue.
We believe that our success depends on our ability to maintain
and improve our strong relationships with the leading OEMs.
OEMs evaluate and select their hard drive suppliers based on a
number of factors, including quality and reliability, storage
capacities, performance characteristics, price, service and
support, ease of doing business, and the supplier’s
long-term financial stability. They typically seek to qualify
two or more providers for each generation of hard drives, and
once an OEM has chosen its qualified hard drive vendors for a
given product, it generally will purchase hard drives from those
vendors for the life of that product. To achieve success with
OEM qualifications, a hard drive supplier must consistently
offer hard drives featuring leading technology, quality, and
reliability at acceptable capacity per disk. Suppliers must
Table of Contents
quickly achieve volume production of each new generation of high
quality and reliable hard drives, requiring access to flexible,
high-capacity, high-quality manufacturing capabilities.
Many of our OEM customers utilize
just-in-time
inventory management processes or supply chain business models
that combine
“build-to-order,”
in which the OEM does not build until there is a firm order, and
“contract manufacturing,” in which the OEM contracts
assembly work to a contract manufacturer who purchases
components and assembles the computer based on the OEM’s
instructions. For certain OEMs, we maintain a base stock of
finished goods inventory in facilities located near or adjacent
to the OEM’s operations.
For an additional discussion of risks related to our need to
adapt to our customers’ business models and maintain
customer satisfaction, refer to Item 1A of this Annual
Report on
Form 10-K.
Distributors
We use a select group of distributors to sell our products to
non-direct customers such as small computer and
CE manufacturers, dealers, systems integrators, online
retailers and other resellers. Distributors accounted for
approximately 39%, 36% and 42% of our revenue for 2006, 2005 and
2004, respectively. Distributors generally enter into
non-exclusive agreements for specific territories with us for
purchase and redistribution of product. We grant our
distributors limited price protection rights.
Retailers
We sell our branded products directly to a select group of major
retailers such as computer superstores, warehouse clubs and
computer electronics stores, and authorize sales through
distributors to smaller retailers. Retailers accounted for
approximately 7%, 6% and 7% of our revenue for 2006, 2005 and
2004, respectively. Our current retail customer base is
primarily in the United States, Canada and Europe. The retail
channel complements our other sales channels while helping to
build brand awareness for WD and our products. Retailers supply
end-users with products to upgrade their computers and
externally store their data for backup purposes. We grant our
retailers price protection and limited rights to return product
on an inventory rotation basis. We also sell our branded
products through the Internet, at our web site.
Sales and
Marketing
We maintain sales offices in selected parts of the world
including the major geographies of the Americas, Asia Pacific,
Japan, Europe and the Middle East. Our international sales,
which include sales to foreign subsidiaries of
U.S. companies but do not include sales to
U.S. subsidiaries of foreign companies, represented 68%,
65% and 63% of our revenue for 2006, 2005 and 2004,
respectively. Sales to international customers may be subject to
certain risks not normally encountered in domestic operations,
including exposure to tariffs and various trade regulations. For
further discussion regarding the risks related to sales to
international customers, see Item 1A of this Annual Report
on
Form 10-K.
For additional information concerning revenue recognition, sales
by geographic region and significant customer information, see
Part II, Item 8 — Notes 1 and 10 of the
Notes to Consolidated Financial Statements.
We perform our marketing and advertising functions internally
and through outside firms. We target advertising, worldwide
packaging and marketing materials to various reseller and
end-user categories. We utilize both consumer media and, to a
lesser extent, trade publications. We have programs under which
we reimburse qualified distributors and retailers for certain
marketing expenditures. We also maintain customer relationships
by communicating with our resellers and providing end-users with
information and support through our web site.
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